S&P affirms State Street

Standard & Poor's said it affirmed its ratings on State Street Corp. and its subsidiaries, including the AA-/A-1+ counterparty credit ratings on State Street.

The outlook is stable.

S&P said ratings on State Street are based on its leadership position servicing and managing the financial assets of global institutional investors. As a financially strong and innovative competitor, State Street is winning new clients and selling more business to existing clients. This bodes well for ongoing revenue growth.

Nonetheless, profit margins are below those of other highly rated fiduciary banks, despite the advantages of State Street's large economies of scale. One factor currently restraining profitability is the bank's strategic push into middle-office outsourcing, which requires large upfront investments in systems and data linkages with clients. In other words, middle-office outsourcing is a product that is not yet self-funding.

Ratings affirmed include State Street Corp.'s counterparty credit ratings at AA-/stable/A-1+, senior debt at AA- and subordinated debt at A+; State Street Bank and Trust Co.'s counterparty credit ratings at AA-/stable/A-1+; and State Street Capital Trust I, State Street Capital Trust II, State Street Institutional Capital A, State Street Institutional Capital B and the trust-preferred securities, all at A.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.